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Invesco Perpetual Latin American Fund

January 2016 (Content as at 31 December 2015)

Overview

Objective

The Invesco Perpetual Latin American Fund aims to achieve capital growth in Latin America. The fund intends to invest primarily in shares of companies in South and Central America (including Mexico) and the Caribbean, although it may include other Latin American related investments. In pursuing this objective, the fund managers may include investments that they consider appropriate which include transferable securities, money market instruments, warrants, collective investment schemes, deposits and other permitted investments and transactions as detailed in Appendix 2 of the most recent Prospectus.

Invesco Perpetual Global Equities market update

Video

21 October 2015

Nick Mustoe, Chief Investment Officer, Invesco Perpetual, and Stephen Anness, Global Equities Fund Manager, Invesco Perpetual

In their recent live interview, Nick and Stephen discussed the outlook for the global equity markets and answered questions on their stock-picking style, the fall-out from China’s slowdown and the US Federal Reserve’s decision not to raise US Interest rates.

Market commentary

Latin American equity markets capped a challenging year by losing further ground in December although the long-awaited decision by the US Federal Reserve to finally raise US interest rates triggered little market reaction. Brazil and Mexico were the weakest performing equity markets. Confidence towards Brazil was soured by disappointing economic data and deteriorating fiscal balances. Any prospect that interest rates could be lowered to boost an economy that is expected to remain in recession in 2016 appears to be more remote following the release of the Q4 2015 Inflation Report. In it the Brazilian central bank raised its inflation forecast, signalling they could resume interest rate hikes to combat inflationary pressures. Replicating the US move, central banks in Mexico and Chile also voted to raise their respective interest rates by 25 basis points on 17 December. In Mexico, domestic activity continues to show strength with unemployment reaching a multi-year low of 4.1% in December.

Fund strategy

Our holdings in Latin America are concentrated in Brazil and Mexico. We also have significant positions in companies based in the smaller economies of Colombia, Chile and Peru. The fund’s diversified approach is reflected in sector positioning, which is spread across a broad range of industries. Our most favoured sectors are consumer discretionary and real estate. During December we added a new position in Alsea, Mexico’s leading operator in the fast food restaurant industry. Driven by solid employment creation, strong real wage growth and low inflation, we believe that Alsea is in a favourable position to boost its earnings potential. We also took a new position in America Movil, a large telecom. The company has a dominant competitive position in Mexico and Colombia and generates healthy cash flow.

Key facts
Product type ICVC
Launch date 05 November 1994
Fund size £139.08m
Historic yield 1.09%
Sector IA Specialist Sector
Available in an ISA? Yes

Fund manager

Dean Newman

Title: Head of Emerging Market Equities
Team: Invesco Perpetual - Emerging Market Equities
Fund details
Fund currency GBP
Trading frequency Daily
Accounting period ends 01 September
Share types
SEDOL ISIN
Accumulation 3302770 GB0033027706
Income 3304828 GB0033048280
Accumulation (No Trail) B3RW8X8 GB00B3RW8X82
Income (No Trail) B3RW8Y9 GB00B3RW8Y99
Y (Acc) BJ04JG3 GB00BJ04JG36
Y (Inc) BJ04JH4 GB00BJ04JH43
Z (Acc) B8N44B3 GB00B8N44B34
Z (Inc) B8N44C4 GB00B8N44C41
Investment levels
Minimum lump sum £500
Minimum additional lump sum £100
Minimum monthly amount £20

Performance

Charges

One-off charges taken before you invest

Entry charge

The entry charge for the fund is up to 5%. This is the maximum that might be taken out of your money before it is invested. For example, if you invest £1,000, an entry charge of 5% means £950 of your money will be used to buy shares in the fund.

The entry charge covers the costs of setting up your investment.

If you invest through a third party (such as a financial adviser), but do not receive financial advice on your investment, this charge may include payments to that third party. For more details see "What share classes are available for your ICVC funds?".

Exit charge

There is no exit charge for the fund.

Charges taken from the fund over a year

Ongoing charge

The ongoing charge figure is based on a fixed, all-inclusive fee and excludes portfolio transaction costs. The ongoing charge for each share class can be found in the relevant Key Investor Information Document available under 'Literature'. Investors will be provided with advance notice if any increases to this figure occur.

The ongoing charge covers all aspects of operating the fund during the year, including fees paid for investment management, administration and the independent oversight functions.

If you invest through a third party (such as a financial adviser), but do not receive financial advice on your investment, this charge may include payments to that third party. Once invested, your contract note or acknowledgement letter will show the amount of any payment in cash terms. For more details see "What share classes are available for your ICVC funds?".

Charges taken from the fund under specific conditions

Performance fee

No performance fee is charged.

Portfolio transaction costs1

On average, over the last three financial years, the fund incurred broker commissions of 0.18% and transfer taxes of 0.01%, as a necessary part of buying and selling the fund's underlying investments in order to achieve the investment objective. A proportion of these costs is recovered directly from investors joining and leaving the fund.

When the fund buys or sells shares, broker commissions and transfer taxes are paid by the fund on each transaction. In addition, there is a dealing spread between the buying and selling prices of the underlying investments. Unlike shares, other types of investments (such as bonds, money market instruments and derivatives) have no separately identifiable transaction costs; these costs form part of the dealing spread. Dealing spreads vary considerably depending on the transaction value and market sentiment. The estimated average dealing spread for the fund is 0.35% of the transaction value.

Comparing portfolio transaction costs for a range of funds may give a false impression of the relative costs of investing in them, for the following reasons:

  • Transaction costs do not necessarily reduce returns. The net impact of dealing is the combination of the effectiveness of the manager's investment decisions in improving returns and the associate costs of investment
  • Historic transaction costs are not an effective indicator of the future impact on performance
  • Transaction costs for buying and selling investments due to other investors joining or leaving the fund may be recovered from those investors. For further information see Pricing policy note below
  • Transaction costs vary from country to country
  • Transaction costs vary depending on the types of investment in which a fund invests
  • As the manager's investment decisions are not predictable, transaction costs are also not predictable

Stamp duty reserve tax (SDRT)1

SDRT is payable by funds which invest wholly or in part in UK equities.

During the last financial year the fund incurred stamp duty reserve tax of 0.00% as a result of investors joining and leaving the fund.

Schedule 19 SDRT was abolished on 30 March 2014 with the final payment being made in April 2014. We will continue to reflect SDRT as a charge to the fund (if applicable) where this payment occurs within the last financial year ending after 31 March 2014. Thereafter no charge will be shown.

Pricing policy note1

We operate a single pricing methodology for this fund and reserve the right to adjust the fund's price to protect your investment from the costs of buying and selling investments that result from other investors joining or leaving the fund. The amount of any such adjustment is calculated by reference to the estimated costs of dealing in the underlying investments, including any dealing spreads, broker commissions and transfer taxes.

Typical adjustments to the fund's price are to increase it by 0.45% for net inflows or decrease it by 0.47% for net outflows.

We usually adjust the price to the maximum extent possible when the value of net contributions or withdrawals is significant, which helps to protect your investment from the costs of the resultant transactions.

1The fund's financial year end is 31 August 2015. Figures in these sections are as at 31 August 2015.

Holdings

Top 10 holdings (%)

Fund
Itau Unibanco 8.46
Vale 7.24
Petrobras 5.2
Ambev 2.93
America Movil 2.79
BRF-Brasil Foods 2.66
CIA Souza Cruz 2.61
Antofagasta 2.53
OGX 2.51
Telefonica Brasil 2.46

Top 10 overweights (%)

Fund
Itau Unibanco 8.46
Arca 3.01
Arca 3.01
Arca 3.01
Arca 3.01
Arca 3.01
Arca 3.01
Arca 3.01
Arca 3.01
Arca 3.01

Top 10 underweights (%)

Fund
Petrobras 5.20
Petrobras 3.92
Petrobras 3.92
Petrobras 3.92
Petrobras 3.92
Petrobras 3.92
Petrobras 3.92
Petrobras 3.92
Petrobras 3.92
Petrobras 3.92

Top 10 equity holdings (%)

Fund Active Index
Itau Unibanco 8.46 3.00 5.46
Vale 7.24 -2.55 9.79
Petrobras 5.2 -7.29 12.49
Ambev 2.93 -0.35 3.28
America Movil 2.79 -2.78 5.57
BRF-Brasil Foods 2.66 1.12 1.54
CIA Souza Cruz 2.61 2.02 0.59
Antofagasta 2.53 2.53 N/A
OGX 2.51 1.05 1.46
Telefonica Brasil 2.46 1.47 0.99

 

Breakdown by country of investment

Chart | Table

Region Fund
Brazil 70.60
Mexico 14.47
Chile 4.07
Colombia 2.69
Argentina 2.38
Panama 1.82
Peru 1.79
Canada 1.29
Guyana 0.65
Cash 0.23

Breakdown by market cap

Chart | Table

Market Fund
£50bn+ 28.80
£25 - 49.99bn N/A
£10 - 24.99bn 12.76
£5 - 9.99bn 9.54
£2 - 4.99bn 19.97
£1 - 1.99bn 15.76
£500 - 999m 8.22
£250 - 499m 3.59
£100 - 249m N/A
£50 - 99m 0.07
£0 - 49m 1.06

Breakdown by sector

Chart | Table

Sector Fund
Financials 20.92
Materials 16.24
Energy 15.24
Consumer Staples 12.98
Consumer Discretionary 9.88
Industrials 9.56
Telecommunication Services 6.65
Health Care 3.49
Utilities 3.22
Information Technology 1.61
Cash 0.23

Literature

Factsheets

Invesco Perpetual Latin American Fund Factsheet  (119 KB)

KIIDs

Invesco Perpetual Latin American Fund KIID acc  (206 KB)

Invesco Perpetual Latin American Fund KIID acc (No trail)  (206 KB)

Invesco Perpetual Latin American Fund KIID acc (Y)  (199 KB)

Invesco Perpetual Latin American Fund KIID acc (Z)  (205 KB)

Invesco Perpetual Latin American Fund KIID inc  (206 KB)

Invesco Perpetual Latin American Fund KIID inc (No trail)  (205 KB)

Invesco Perpetual Latin American Fund KIID inc (Y)  (198 KB)

Invesco Perpetual Latin American Fund KIID inc (Z)  (204 KB)

Application form

ICVC & ISA Application booklet 15/16  (236 KB)

Product & fund information

ICVC ISA Key Features and Terms and Conditions  (4 MB)

ICVC Supplementary Information Document (SID)  (4 MB)

Financial reports

Invesco Perpetual American Inv Series Annual Report 2011 (Long Form)  (342 KB)

Invesco Perpetual American Inv Series Annual Report 2012 (Long Form)  (266 KB)

Invesco Perpetual American Inv Series Annual Report 2013 (Long Form)  (405 KB)

Invesco Perpetual American Inv Series Annual Report 2013 (Short Form)  (132 KB)

Invesco Perpetual American Inv Series Annual Report 2014 (Long Form)  (503 KB)

Invesco Perpetual American Inv Series Annual Report 2014 (Short Form)  (167 KB)

Invesco Perpetual American Inv Series Annual Report 2015 (Long form)  (436 KB)

Invesco Perpetual American Inv Series Annual Report 2015 (Short form)  (156 KB)

Invesco Perpetual American Inv Series Interim Report 2014 (Long Form)  (299 KB)

Invesco Perpetual American Inv Series Interim Report 2014 (Short Form)  (157 KB)

Invesco Perpetual American Inv Series Interim Report 2015 (Long Form)  (299 KB)

Invesco Perpetual American Inv Series Interim Report 2015 (Short Report)  (160 KB)

Forms

ISA Additional Permitted Subscription application form  (89 KB)

Brexit – the pros and cons

Article

04 August 2015

John Greenwood, Chief Economist, Invesco Ltd

The British public will soon have a chance to vote in the “in-out” referendum on continued membership of the European Union? Will the economic benefits of staying in the European project outweigh the costs? If the UK does decide to leave, what are the options available?

Investment risks

The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. Past performance is not a guide to future returns.

As this is an emerging market fund, you should be prepared to accept a higher degree of risk than for a fund with a broader investment mandate as there is potential for a decrease in market liquidity, which may mean that it is not easy to buy or sell securities. There may also be operational difficulties.

The fund may use derivatives (complex instruments) in an attempt to reduce the overall risk of its investments, reduce the costs of investing and/or generate additional capital or income, although this may not be achieved. The use of such complex instruments may result in greater fluctuations of the value of the fund. The Manager, however, will ensure that the use of derivatives within the fund does not materially alter the overall risk profile of the fund.

Important information

Yield and performance figures are based on the accumulation share class.

All fund portfolio figures are as at date shown (source: Invesco Perpetual).

Fund performance figures are shown in sterling on a mid-to-mid basis, inclusive of net reinvested income and net of the ongoing charge and all other fund expenses to 31 January 2016. Benchmark performance figures are shown in sterling on a total return basis to the same date. The figures do not reflect the entry charge paid by individual investors. Graph figures are as at the end of the relevant month unless otherwise stated. Standardised past performance figures are as at 31 December 2015. (Source: Lipper).

The Historic Yield reflects distributions declared over the past twelve months as a percentage of the mid-market price of the fund, as at the date shown. It does not include any entry charge and investors may be subject to tax on their distributions.

Where Invesco Perpetual has expressed views and opinions, these may change. Where securities are mentioned they do not necessarily represent a specific portfolio holding and do not constitute a recommendation to purchase, hold or sell.

For the most up to date information on our funds, please refer to the relevant fund and share class-specific Key Investor Information Documents, the Supplementary Information Document, the Annual or Interim Short Reports and the Prospectus, which are available using the contact details shown.